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Energy and ESG initiatives are for ‘us and our customers,’ Masters tells EUCI Texas Energy Online Conference

September 27, 2021

CyrusOne Director of Power and Energy Todd Masters discussed the company’s renewable goals, focus on resiliency and recent energy efficiency initiatives at EUCI’s Texas Energy Online Conference.

On Sept. 15, Masters joined Port Houston Director of Environmental Affairs Trae Camble and Texas Energy Poverty Research Institute Executive Director Dana Harmon on the “Energy Consumer Perspectives & Initiatives” panel with moderator and Energy Edge Consulting Principal Matt Hobson.

As a major player in the data center sector, energy issues are critical to CyrusOne. Hobson wondered how the company balances the need for cost-competitive energy with furthering its own environmental, social and governance (ESG) goals.

“We’re not just doing it for ourselves, but [we’re also doing it] for our customers,” Masters said. “And in the majority of our leases, energy is a direct pass-through. We don’t mark up anything, which is good because so many of our customers are really pushing for the renewable options in line with what we like to do. But we also have to keep in mind that other customers have not moved there yet – [for them] the bottom line remains the most important aspect.”

That means CyrusOne must continually seek a balance between cost-competitive energy and its ESG goals.

“Clearly in a market like Texas, where renewables are still pretty affordable even with the recent ramp-ups, it makes it a whole lot easier to match that up,” Masters added. “But in other markets, where you see that huge gap, we have to make real decisions. And it’s not just the energy that we procure, but also how much we can save through energy efficiency projects. Then keep in mind it’s also water and how to balance these multiple pieces. It’s something that’s constantly changing, but maintaining the strategy is where we’re at.”

Renewable energy also remains an integral part of CyrusOne’s overall sustainability strategy. As part of its goal to achieve net-zero carbon emissions by 2040, CyrusOne has reduced and continues to reduce its energy consumption. It also seeks lower-carbon energy options, such as directly procured renewables, and uses offset mechanisms, such as Renewable Energy Certificates and carbon offsets.

Hobson pointed out CyrusOne has aggressive renewable goals and has made them public. He he asked Masters to share any updates on those goals.

“We absolutely have aggressive goals and clearly not just in Texas,” Masters replied. “Right now, Europe is well ahead of schedule – 100% of our energy [there] is procured renewable through the energy supply contracts. We also have a solar project we’re assisting with in Arizona. And just as of last year, we took about 67 megawatts from Enel Green’s Azure Sky solar + storage project in Haskell County [Texas], which covers a substantial amount of our Dallas, or what we call our North Texas load, including our headquarters.”

Yet CyrusOne has even more renewable plans in the state, according to Masters.

“We’re taking a look at projects – we have a substantial presence in Houston, and next up would be to figure out how we cover our Austin and San Antonio data center loads as well,” he said. “It’s definitely a growing focus for us.”

Having weathered Winter Storm Uri in February 2021, data center resiliency is another area of focus for CyrusOne. Nearly a year removed from the devastating event, Hobson asked Masters to share any learnings and considerations for future policy.

“Data center resiliency is absolutely critical for us,” Masters said. “We have 100% backup for all our data centers – some of them we had to use that, others we utilized in precaution with the rolling blackouts. That was definitely one of the trickiest parts of it. Before you even look at the cost and pricing for what that stuff was, keeping the data center on was the key aspect.”

In some ways, Uri changed CyrusOne’s perspective when considering the risk analysis of what’s possible. Preparation for future storms remains critical.

“Leading up into that storm, you’d think that winter of 2011 was probably that cold winter when Texas froze over,” Masters said. “This particular scenario wasn’t played in, especially when it came to how your procure the energy and to the fact that there were fuel depots. If you were calling for fuel for your generators, it was very possible you were going to have to have it shipped in from other areas in the Midwest. Being able to prepare for that in the future is key. And just knowing that the resiliency is increasing to protect us from these [future] storms is very important for us.”

In additional to renewables and resiliency, CyrusOne also has a relentless focus on energy efficiency. Hobson asked Masters to detail some of those efficiency initiatives.

“We have multiple projects, and one of the things we have focused on is standardizing the design of our data centers, which allows us to take different efficiency measures,” he said. “There are different layers to those measures. One would be standard economizations, your VFDs, more efficient equipment. Anything like that we’ll continue to manage.”

CyrusOne also pays considerable attention to the data center floor.

“By separating the hot-out/cold-out containment streams, you become more efficient in your cooling and your heating,” Masters said. “And then we make sure our customers have the ability to get incentives based on the servers they put in that are more efficient.”

When talking about energy efficiency, one must also consider growth.

“If our company were to grow 10% between now and 2040, which we have a goal to be carbon-free by 2040, 80% of those data centers do not exist today,” Masters explained. “So, we are always looking forward to see what’s the next-best thing, because we all know any electron you don’t have to use is one you don’t have to pay for.”

Hobson directed the panel to predict the biggest drivers of change in the energy industry over the next 10 years. After Camble and Harmon discussed energy producers and extreme weather, Masters noted data centers will also have an important role to play.

“When you throw the combination of AI and 5G and these other factors coming in, we will continue to need more energy,” he said. “But also, the services that will come out of that will be huge and it will be used across the board. We have to have that energy – we have to have that communication. It will be critical.”

To wrap up the session, Hobson asked the panel if it could have one energy-related wish for the future, not including free power, what would it be?

“Batteries,” Masters suggested. “If we could solve [storage issues with] batteries, that would give us so many more options – generation and ability to really expand renewables and not damage resiliency. That’s what I’d really like to see.”